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The Financial Services Authority has contracted commercial firms to develop its information technology for the first time in an effort to enhance how the UK watchdog regulates organisations.

The four-year deal involves consultancies Capgemini, Tata Consultancy Services and Xansa and is meant to “enable the FSA to deliver a large portfolio of business applications more effectively," the regulator said in a statement.

A spokeswoman for the FSA was quick to stress this deal does not signal a change in the level of regulatory scrutiny UK companies are subjected to, rather more effective application of the existing rules.

The contractors will focus on four areas. They will overhaul the FSA’s Integrated Regulatory Reporting systems, the Arrow II supervision programme, the technology for regulating small firms and its market monitoring tools.

The decision to outsource its IT followed an effectiveness review by the FSA last year.

Darryl Salmons, chief information officer at the FSA, said: “Through the support of Xansa, and our other partners, the FSA can deliver a large portfolio of business applications at the same time. This will give us the flexibility needed to meet the challenges any modern regulator faces.”